Apparently,
1) states are going through severe financial crunch and 2) The "investments funds" that were set up to hold the 529 plan capital experienced severe losses.So, the education plans try hard to weasel out of the tuition obligations. Most of them are not backed by full faith and credit of the states.
A great invention of Alabama bureaucrats, is refusing to cover tuition costs that are "above state average", without, of course, paying any more where the costs are below average.
Alabama 529 plan is already embroiled in lawsuits, and many states will likely be forced to try to not honor their tuition obligations.
I never invested in 529 plans, partly due to investment inflexibility, partly because I thought that corrupt fools will manage my money, and partly because of solvency concerns. I always thought that 529 plans amount to exchanging money for a vague promise that states can always renege on.
Comments?
i